TOULOUSE, France, Feb 26 Airbus
announced a hike in jetliner production on Wednesday, echoing
plans by arch-rival Boeing as they battle to meet record
demand for more fuel-efficient planes.

The news came as Europe's largest aerospace group,
previously known as EADS, unveiled higher 2013 profits, but also
cautious forecasts for this year and fresh charges for its
newest A350 model.

Airbus said it would raise output of its A320 family of
small jets to 46 aircraft a month by the second quarter of 2016
from 42 now. Boeing's rival jet aims to hit 47 a month by 2017.

Planemakers' order books are bulging after a surge in demand
for latest fuel economies, pointing to rising revenues from
mid-decade but also putting unprecedented demands on a global
network of suppliers.

The increase means Airbus will be producing an A320 family
jet, worth around $100 million at list prices, every seven
working hours.

The ramp-up to 46 appeared at least partly to reflect
already announced additions to capacity as a new assembly plant
in the U.S. state of Alabama prepares to come on stream.

Airbus has said it plans to start delivering jets from
Mobile, Alabama from 2016, rising eventually to four a month.
Those plans had not previously been included in Airbus's main
production target.

"Mobile is the next place where we will ramp up and we will
start producing aircraft there in 2015, first deliveries should
happen in 2016. Everything is according to plan and we are
training our first American colleagues in Hamburg," Airbus Group
chief executive Tom Enders told Reuters.

His comments appeared to confirm that Airbus would not cut
output in Europe to make way for the new U.S. plant.

"We looked for this step as this will help to boost organic
growth," DZ Bank analyst Markus Turnwald said in a note. "We see
a rate of 48 in 2017 thanks to the new U.S. factory."

In order to avoid bottlenecks in its supply chain, Airbus
has previously taken measures such as buying up a smaller
supplier and reshuffling management at Premium Aerotec, one of
its main in-house suppliers.

Airbus said it had carried out a "comprehensive assessment"
of its suppliers before taking the decision to produce more.

POSITIVE COMMERCIAL ENVIRONMENT

For 2014, Airbus Group forecast flat revenues and "moderate"
growth in operating margin, which it still expects to reach 7-8
percent in 2015 compared with 6 percent in 2013.

From Jan. 1, Airbus Group changed its name from EADS and
reorganized itself into three divisions by merging its defence
and space units alongside the Airbus jet and helicopters units.

It had already reported that its Airbus planemaking
subsidiary had beaten its gross order target of 1,200 planes
with orders of 1,619 aircraft in 2013, outselling Boeing but
failing to catch up in terms of jets delivered.

"We do expect, particularly with the better growth numbers
forecasted for Europe, America, that the commercial environment
will stay positive," Enders told journalists.

Airbus, which is heavily dependent on recently unsettled
emerging markets, said it was assuming "no major disruptions" to
the world economy but outlined what some analysts described as
lukewarm forecasts for 2014.

Shares in the group were down 0.6 percent to 52.78 euros at
1030 GMT, broadly in line with France's CAC 40 index.

Airbus predicted 2014 deliveries in line with those of 2013,
meaning it looks set to remain in second place behind Boeing on
production this year, and reaffirmed it would deliver its first
A350 to Qatar Airways by the end of 2014.

"We are not planning any new adventures for 2014 - the focus
is on execution, execution, execution," Enders said.

Net profit also rose 22 percent to 1.5 billion euros after
charges of 434 million related to higher costs on its newest
widebody jet, the A350, and 292 million driven mainly by
restructuring of defence and space activities.

The results come two weeks after UK engine maker Rolls-Royce
rocked the aerospace sector by warning defence spending
cuts would halt its profit growth in 2014.

In January, Boeing posted strong fourth-quarter profits but
sent its shares sliding with more cautious-than-expected profit
and cashflow forecasts for 2014.

With its traditional defence customers in Europe reducing
spending, Enders said the group would have to look more at
export opportunities, and adapting its products accordingly.

"They are over-sophisticated, and that comes with additional
costs, so there's a job to adapt our product to demand from
non-European markets," he said.

However, the chances of selling the Eurofighter jet to other
nations were not so good, he said.

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